Topic

Inventory Control
Group MembersShalini Catherine Panna Rajnikant George Sitakanta Behera Ajay Kongari Mahendra Prasad

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All the materials , parts, suppliers, expenses and in process or finished products recorded on the books by an organization and kept in its stocks, warehouses or plant for some period of time.

XIDAS, INVENTORY CONTROL

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Inventory control is the technique of maintaining the size of the inventory at some desired level keeping in view the best economic interest of an organization.

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Type of Inventory
(1)

Reason for holding the Inventory

Raw materials To reap the price advantage available on seasonal raw materials.

(2) Work in progress

To balance the production flow.

(3) Ready made components (4) Scraps (5) Finished Goods

When the components are bought rather than made. They are disposal of in bulk. Lying in stock rooms and waiting dispatches
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against fluctuations in demand; Better use of men, machines and material; Protection against fluctuations in output; Control of stock volume; Control of stock distribution.
Protection

XIDAS, INVENTORY CONTROL

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the inventories; Procurement of inventories; Receiving and inspection of inventories; Storing and issuing the inventories; Recording the receipt and issues of inventories. Physical verification of inventories; Follow-up function ; Material standardization and substitution.
Planning

XIDAS, INVENTORY CONTROL

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Executive decide two basic issues while dealing with inventories; (a) How much of an item to order when the inventory of that item is to be replenished. (b) When to replenish the inventory of that item. By definition, inventory facilitate production or satisfy customer demands. Inventory system is a set of policies and controls which monitors and determines the levels of inventory. Inventory conventionally include raw materials, work-in-progress, components parts, supplies and finished goods. Operations is a transformation process in which the inputs are raw materials and output is the finished goods.

Suppliers

Raw materials

Production Work-in-progress

Finished good

customers.

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Supply rate

Inventory level

Demand rate

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 Deciding

the maximum- minimum limits of inventory; Determination of Reorder point; Determination of reorder quantity; Perpetual inventory control; ABC analysis; Method of control through turn over.

XIDAS, INVENTORY CONTROL

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of inventory above which should not be allowed to be kept. This quantity is fixed keeping in view the disadvantages of overstocking; Factors to be considered: Amount of capital available. Godown space available. Possibility of loss.
Quantity

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 Cost

of maintaining stores; Likely fluctuation in prices; Seasonal nature of supply of material; Restriction imposed by Govt.; Possibility of change in fashion and habit.

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represents the quantity below which stocks should not be allowed to fall . The level is fixed for all items of stores and the following factors are taken into account: 1.Lead time2. Rate of consumption of the material during the lead time.
This

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 It

is the point at which if stock of the material in store approaches, the store keeper should initiate the purchase requisition for fresh supply of material. This level is fixed some where between maximum and minimum level.

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 It

is also known as standard order quantity , optimum quantity or economic lot size. By definition economic order quantity that size of order for which the total cost is minimum.

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 The

widely used formula is

EOQ ={2RCp/Ch} Where , R= Annual quantity to be used in units. Cp=Cost of placing an Order. Ch= cost of holding one unit for one year.

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It is efficient control of stores requires greater in case of costlier items.

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Item A

Quality Costlier

Quantity order Less

Checking Regular system to see that there is no overstocking as well as that there is no danger of production being interrupted for unwanted material. Position being viewed in each month Order in large quantity so that cost can be avoided

B C

Less costlier Economical

Order may be on review basis. Larger

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It is a method of recording stores balances after every receipt and issue, to facilitate regular checking and obviate closing down for stock taking.

-Wheldon

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 Stores

ledger, stores control, cards or bin cards are properly maintained ; Quantity balance store shown in the store ledger; stock control and bin cards are reconciled; Exploring the cause of discrepancies if any physical balances and book balances.

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Daily Inventory Balance Record

Product Month Year 5 Physical Inventory 6 Variation Today 7 Variation This Month

1 Opening Physical Inventory

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 TOTALS

Day

2 Deliveries

3 Meter Sales

4 Inventory Should Be

Balance sheet is were information is calculated to determine losses and gains from daily sales. This is a very important part of fuel management it will give you important records of sales (this is inventory control).

Daily Readings

Product Month Year Total Meter Sales Tank 1

Dip cm. Inventroy Water Dip Dip litres cm. cm.

Day

Pump 1

Pump 2

Pump 3

Pump 4

Tank 2
Inventroy Water Dip litres cm.

Readings Sales Readings Sales Readings Sales Readings Sales

Total Physical Inventory

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

This is were information collected from meter totals and tank dips are added and recorded.

Monthly Summary
Product Storage Capacity Total Variation Sales for Month Product Storage Capacity Total Variation Sales for Month Product Storage Capacity Total Variation Sales for Month

Month

% Loss

% Loss

% Loss

This is were we record our calculated losses and gains for every individual month. This sheet is used for the years sales report. Will give you sales of individual months. Record keeping is a important method of tracking your inventory.

It means how many times a companys inventory is sold and replaced (finished product)

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Inventory ratio (Raw material)-

The value of material consumed during a period Average value of inventory during that period
High ratio = fast moving stock

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YOUR CRITICAL ANALYSIS

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Thank you

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